Apr 23, 2014

Measures of Housing Distress at 7+ Year Lows

Black Knight Financial Services said today that the mortgage delinquency rate in March was the lowest in the U.S. since October 2007 and the foreclosure rate was the lowest since October 2008.  September 2008 is the date most commonly used to mark the beginning of the foreclosure crisis.  Foreclosure starts in March also hit a 7.5 year low.

In its monthly "First Look" report the company said that the rate of loans that were 30 or more days past due in March but not in foreclosure was 5.52 percent or 2.77 million housing units.  This was a -7.57 percent change (-221,000 units) from February and 16.29 percent lower than in March 2013 when total delinquencies were approximately 3.31 million. 

Of those delinquent mortgages 1.2 million were more than 90 days past due but not yet in foreclosure.  That was a decline of 43,000 loans month-over-month and 267,000 on an annual basis.
Loans in foreclosure, often called the foreclosure inventory, numbered 1,070,000 in March, down 45,000 from February and 619,000 compared to March 2013.  The foreclosure inventory represented 2.13 percent of mortgaged homes in the U.S., a decline of 4.23 percent for the month and 36.69 percent from the year before.

Black Knight says the total of loans past due or in foreclosure has slipped below 4 million units for the first time since November 2007 with a total of 3.84 million homes in those combined categories.  This is a month-over-month change of -266,000 and a decline year-over-year of 1,156,000.

The states with the highest rates of non-current loans in March were Mississippi (13.39 percent), New Jersey (12.93 percent), Florida (12.10 percent), New York (11.09 percent), and Maine (10.58 percent).

Several states have shown substantial improvement in their non-current loan percentages over the last six months.  States with declines in those percentages ranging from 19.22 to 21.42 percent over that period were California, Arizona, Illinois, Florida, and Nevada.  At the same time there were five states in which the non-current rate deteriorated by approximately 10 percent, Oklahoma, New York, New Mexico, Alabama, and Louisiana.

There were 88,100 foreclosure starts nationally in March compared to 91,993 in February.  This was a 4.24 percent decrease and starts were down 27.19 percent from one year earlier.  Foreclosure sales as a percentage of seriously delinquent loans ticked up 9.15 percent to a rate of 1.83 percent, a rate 6.37 percent below that of March 2013.

Black Knight said that loan prepayment rates, while still down nearly 60 percent from levels in March 2013, rose in March by 20.84 percent to 0.80 percent.

The company will provide a more in-depth review of this data in its monthly Mortgage Monitor report, scheduled for release in early May.

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